Gold prices extended losses on Monday, after last week biggest weekly decline since November on speculation that the Federal Reserve will increase interest rates next year, reducing demand for the metal as a store of value. Gold futures edged 0.53% lower to $1,328.90 per ounce at the time of writing, while silver futures declined 0.47% at $20.230 per ounce at the same time. The dollar index, which measures the strength of the greenback against a basket of six major currencies; rose slightly by 0.01% standing at 80.113 points. Shares in the world’s largest gold-backed exchange trade fund, SPDR Gold Trust, came in at 816.97 tons on Friday.
Gold – Interest rate hike speculation
Minutes from the Federal Reserve’s (Fed) March meeting released last week, showed that Fed policymakers forecasted the benchmark rate, would increase by at least 1% by the end of 2015 and by 2.25% by the end of 2016. In December, three current policymakers forecasted the Fed to hold zero rates until the end of 2015. Last week, the Federal Reserve also announced a further reduction to its monthly bond purchases by another $10 billion to $55 billion.
Gold – China
Meanwhile in China, the HSBC Markit Economics Flash Purchasing Managers’ Index (PMI) for March came in lower than expected, dropping to an eight-month low of 48.1, compared to 48.5 recorded in the previous month and analysts forecast of 48.8. A figure below 50 indicates a contraction and above indicates expansion. The manufacturing output index dropped to an 18-month low of 47.3 in March, compared to 48.8 seen in the previous month. Gold has climbed by 10% this year on the US economy growth concerns and the tension in Ukraine. Goldman Sachs Group Inc. forecasted the world’s largest economy will decline further. Visit www.hymarkets.com to find out more about our products and start trading today with only $50 using the latest trading technology today
The post Gold Prices Extend Losses on Interest Rate Hike Speculation appeared first on | HY Markets Official blog.
Article provided by HY Markets Forex Blog
